Argentina Analysis: Comparison of category activity in 2007 versus 2006

The Selection of Categories was done to highlight significant change in the marketplace for a cross section of the entire category universe. The analysis is based on number of spots.

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Highlight on Growth

The three categories that show the highest growth are Telecomm Equipment Manufacturers/Telecomm Carriers, listed under Wireless Equipment & Svcs, which grew by 26.22%, Health/Beauty: Fragrances which grew by over 20%, and Pharmaceutical which had a growth of just under 20%.

Telecomm growth was driven primarily by Sony Ericsson who aggressively promoted its expanded line of new cellular phones with the music download attributes.

The Fragrance category was driven by the PUIG Group (Carolina Herrera, Nina Ricci, Paco Rabanne), the LVMH group (Christian Dior, Kenzo, Givenchy, Guerlain and Loewe), L'Oreal and Procter & Gamble (Hugo Boss, Lacoste, Escada) who all heavily promoted their fragrance lines on a seasonal level, primarily Valentine’s, Mother’s Day, Father’s Day and their strongest campaigns during the Christmas holidays.

The increase in Pharmaceutical spending was driven by Bayer and Boehringer Ingelheim as they strove to gain and/or hold market share.

Understanding Market Declines

On the downside Food-Packaged Goods (Dairy and Others) had significant declines of 20% in total spots aired from 2006 to 2007.

Usually this kind of drop could be attributed to multiple companies electing to market in other media. In this case the drop in both categories was driven by Danone. Danone either reallocated or cut advertising expenditure by 24% in both categories. So there is a one-to-one correlation between the drop in expenditure by Danone and the over drop in both. One possible explanation for this drop is that in May 2007 Danone announced the acquisition of Vialat, a dairy company in Chile. This acquisition may have affected the allocation of the media budget or they may have been reducing spending developing a new marketing strategy for 2008.

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